Ukip leader Nigel Farage after beating the Tories at Eastleigh. His party is pinning a lot on the local county council elections. Photograph: Luke Macgregor/Reuters

'They are a nightmare for us," groans one Conservative MP. "Complete nightmare." A Labour counterpart sort of agrees: "We expect Ukip to make life even more difficult for the Tories, but that does not necessarily mean that it will be to our benefit." When I asked a Lib Dem strategist, a man normally highly confident about the clarity of his crystal ball, what he expected to happen in the county council elections on 2 May, he replied: "I am going to be very unhelpful. Ukip makes it very hard to call."

Rightly or not, local elections are always treated, by the media and the politicians, as a litmus test of the national mood. All the contestants regard this year's battle for control of the counties – 2,449 seats are at stake – as both especially crucial and unusually unpredictable. Local elections may not be a reliable predictor of the next general election; in fact, they are often a poor guide to what will happen when voters are asked to choose a Westminster government. Yet they still matter to the national picture. Because of the impact they have on the parties' relative morale, the way in which the media rate them, and the authority of leaders over their troops, they can be very important in setting the weather.

For the Conservatives, these elections were always going to be tough in almost any circumstances. The last time the seats were up for grabs was in May 2009, a bleak period of Gordon Brown's premiership. I would have said it was a nadir, except he had so many of them. Surfing the then powerful wave of anti-Brown sentiment, the Conservatives won bags of seats and took control of traditionally solid Labour bastions, such as Derbyshire.

More optimistic Tories talk about containing their losses to 200 seats, and that sort of result will be shrugged off as a typical case of midterm blues at a time of economic adversity. More pessimistic Tories fear a massacre that could cost them many more seats. Given the fragile psychological state of the Tory party, that could easily trigger another backbench fever about the leadership of David Cameron and the performance of George Osborne.

On the face of it, these elections should be highly promising for Labour. Fighting from the depressed base set four years ago, when they lost all their county councils and plunged to a 23% vote share, they can't help but win hundreds of seats. What will matter is precisely how many hundreds – and how many shire halls that delivers into their control. It will also be important where they win. Ed Miliband needs to demonstrate – as he spectacularly did not at the Eastleigh byelection – that his "One Nation" party is becoming more competitive in the south. Piling up huge numbers of votes in the north, but failing to make convincing headway in the south, is not a recipe for ultimate Labour success.

I am struck that Labour people are keen to downplay expectations of a great result for them. They are scorning the Tory claim that Labour ought to be aiming to win 500 seats and saying they are finding it hard to generate enthusiasm when the national mood is so "anti-political". It is true enough that this is a problem for Labour; it is at the same time a rather convenient excuse. Labour's current opinion poll lead is unconvincing even to some members of the shadow cabinet who fear that it could easily evaporate if the economy eventually turns up. Ed Miliband needs a showing at these elections at least commensurate with his polling position if those concerns are not to swell.

As for the Lib Dems, they have seen their councillors slaughtered in both of the local election rounds they have faced since they entered government. They are braced for more losses and just praying they won't be quite as severe as last year and the year before. They have a couple of advantages. They are not the incumbents, and therefore do not have a record to defend, anywhere except Northumberland, where they have a minority administration. The Lib Dems also have a history of out-performing their national poll rating in council contests. The worst scenario for the Lib Dems, one that could trigger a renewed bout of agitation about Nick Clegg's position, would be if their national vote share fell behind that of Ukip.

Nigel Farage is the wild card of these elections. We know Ukip are on a roll. They beat the Tories at the Eastleigh byelection. They are hoping to translate that into success in ballot boxes by fielding 1,700 more candidates than Ukip did last time around, meaning they will be on offer to voters in about three-quarters of seats. Some of these Farageist standard bearers, perhaps a lot, perhaps even a majority, will be "paper" candidates who will not be capable of much campaign activity because the party lacks the resources to support them. All the same, mobilising such a large number of candidates is a major step up for a party that won just seven seats the last time the counties were contested.

In advance of the elections, all the main parties are trying to manipulate how the results are interpreted by setting low targets for themselves and high bars for their opponents. Not so Ukip. Exceptionally, it is raising expectations about its performance by talking a highly ambitious game. Nigel Farage tells the Observer: "I expect that Ukip's vote share will be above 14% across the country and in some places significantly higher."

The orthodox view is that this poses a great menace to the Tories. I have had several Conservative MPs report to me that they have lost significant chunks of their local party activists to Ukip. Apart from playing its usual tunes on Europe and immigration, Ukip hopes to harvest local discontents in rural England, especially on planning issues, by making itself the voice of opposition to the high speed rail link, windfarms and green belt development.

There's an argument that a strong showing by Ukip could help Labour. By leeching away Conservative votes, Nigel Farage might assist Ed Miliband's party to take seats Labour might otherwise have lost to the Tories. In other places, Ukip could give a helping hand to the Lib Dems by splitting the rightwing vote to the advantage of Nick Clegg's party.

Tories certainly fear this happening, but it may not be quite as simple as that. While Ukip is probably gaining most of its new support from former Tory voters, it is also drawing in people who used to back Labour or the Lib Dems and adding others who normally don't turn out for elections at all. As he seeks to broaden his party's base, Nigel Farage wants Ukip to be more than a home for angry, generally more elderly, rightwing voters in the leafier parts of the country. The party is fielding a lot of candidates in Manchester, where the Tories barely exist, a sign that Ukip has ambitions to establish itself as a challenger to Labour in the north of England. If they can draw the sort of vote share being predicted by Mr Farage, and a proportion of that comes from Labour, that will hurt Ed Miliband.

All the main parties have cause to be anxious about Ukip and so all have been trying to understand the rise of the Farageists. One way they do this is to put together focus groups of voters who have switched to Ukip to try to fathom why these people are attracted to Nigel Farage's gang. One senior party strategist says he listened in some wonderment as his focus group of Ukip voters spent an entire 90-minute session wailing and gnashing their teeth about the state of Britain. Not a good word did they have to say about the country today. At the end of the session, he thanked them for their time, and said he had one more question. Was there anything about Britain that made them feel proud? There was a silence. Then one man leant forward and said: "The past." The rest of the group nodded in agreement.

The Ukip manifesto is a nonsense of contradictions. David Cameron, Nick Clegg or Ed Miliband would be torn to shreds by the media if they ever tried to offer anything similar. Mr Farage promises tax cuts for everyone and spending increases on just about everything from building more prisons to restoring the student grant to more generous pensions. But strategists from the main parties tell me that they get nowhere when they try to discuss policy with sample groups of Ukip voters. Even when they agree that the Ukip prospectus doesn't make sense, reports one party pollster: "They just don't care about that."

A Ukip vote is not mainly, if at all, about making a choice based on an assessment of policy. More than anything, it is about expressing an emotion – usually a feeling of intense rage about how Britain has changed and how they are served by the established political parties. It is a howl against the modern world, a scream against the establishment. There's no arguing with that. Or, if there is a way of dealing with it, none of the main parties has yet discovered what it is.

• This article was amended on 22 April 2013 to correct the picture caption. The original said Ukip won the Eastleigh byelection. It came second, behind the Lib Dems.